Peter Leeson is often fun

I’m not entirely convinced that he’s always right though:

Their appearance was all the more strange because between 900 and 1400 the Christian authorities had refused to acknowledge that witches existed, let alone try someone for the crime of being one. This was despite the fact that belief in witches was common in medieval Europe, and in 1258 Pope Alexander IV had to issue a canon to prevent prosecutions.

But by 1550 Christian authorities had reversed their position, leading to a witch-hunt across Christendom. Many explanations have been advanced for what drove the phenomenon. Now new research suggests there is an economic explanation, one that has relevance to the modern day.

Economists Peter Leeson and Jacob Russ of George Mason University in Virginia argue that the trials reflected “non-price competition between the Catholic and Protestant churches for religious market share”.

As competing Catholic and Protestant churches vied to win over or retain their followers, they needed to make an impact – and witch trials were the battleground they chose. Or, as the two academics put it in their paper, to be published in the new edition of the Economic Journal: “Leveraging popular belief in witchcraft, witch-prosecutors advertised their confessional brands’ commitment and power to protect citizens from worldly manifestations of Satan’s evil.”

The paper itself is here.

Idiot is idiot

The leader of Canada’s most populous province has lashed out at prominent business owners who clawed back employee benefits and paid breaks in order to offset the costs of a minimum wage increase, describing the move as the “act of a bully”.

Kathleen Wynne, the premier of Ontario, announced last year that the province would raise its minimum wage to C$15 ($12) an hour by 2019. The first phase went into effect this week, hiking the minimum wage for workers from C$11.40 an hour to C$14.00.

Days into the wage hike, it emerged that employees at two locations of Tim Hortons – Canada’s emblematic coffee chain that claims to pour eight of every 10 cups of coffee sold in the country – would no longer be paid for breaks and would have to cover at least half the costs of their health and dental benefits.

The owners of the two stores, Ron Joyce Jr and his wife, Jeri Horton-Joyce – who are the son and daughter of the chain’s co-founders – said in a letter to employees that the changes were due to the increased minimum wage.

Labour compensation is labour compensation, labour wages are labour wages. When a politician, by fiat, changes labour wages we might well expect to see a change in non-wage labour costs in order to keep labour compensation around and about static.

You know? Canute and the tide, prices in a market economy?

Well, yes, obviously

Labour’s plan to hike the minimum wage to £10 per hour could put increasing numbers of workers at risk of losing their jobs to robots, an economic think tank has suggested.

Well, yes. But that’s going to happen anyway. All that will change is the speed at which it will happen.

Much more important is that a high minimum wage will stop some to much of the experimentation needed to produce jobs once the robots are taking some of them.

This is the most pernicious effect I’m afraid. It increases the costs of trying to do new things with that newly abundant – but still expensive – labour.

Err, how? What?

What laws that is:

The government, he writes, must enact laws that require manufacturing’s share of the GDP to rise from its current 12.5 percent to something closer to the norm for OECD nations—somewhere between 17 percent and 19 percent.

How in buggery do you do that? Let alone why would you want to.

Such a changeover, Uchitelle acknowledges, would require the enactment of steep tariffs, of domestic content standards far stricter than any now on the books, and perhaps a trade war with China and other nations. It would require treating manufacturing as we’ve treated agriculture since the 1930s. “The political maneuvering involved in authorizing the annual farm subsidy once drew headlines and controversy, but now rarely does.” (Of course, that’s partly because the handful of agribusiness giants can lobby behind closed doors.) “We accept that farming is a federally subsidized market activity,” he continues. “Manufacturing must proceed along a similar path.”

Umm, right. Agriculture’s share of GDP has continued to decline though, hasn’t it?

It’s fun how people get rich, isn’t it?

The brothers’ intense personal rivalry has loomed large over India’s business scene since 2002, when the death of their father Dhirubhai Ambani, founder of the Reliance Industries group, led to a rift over strategy.

The dispute eventually led to the break-up of Reliance Industries when, in a 2005 peace deal brokered by their mother, Mukesh retained the highly profitable oil and gas business and Anil walked away with telecoms and power.

Both men continued to operate under the Reliance brand, although it was Mukesh whose fortunes prospered. The elder brother is now India’s richest man, with an estimated net worth of $41 billion,

Sure, he started out rich which helps. But the surge in fortune has come from launching free and heavily discounted mobile telecoms services. The same thing which has severely diminished his brother’s fortune.

Who are the people who really benefit from this? Well, sure, he’s a nice stash now, hasn’t he. But what about those hundreds of millions of Indians who have received free and heavily discounted mobile telecoms services? The cumulative gain there is rather larger than his increase in the stash. Very much larger in fact.

Which is why the system works. As William Nordhaus pointed out.

Causes of depopulation

Well, there could be many reasons why a small island off Scotland doesn’t have a viable population. Weather, jobs, just the sheer misery of tiny, tiny, communities.

But this would also be a problem:

critics say Canna’s difficulties are exacerbated by strict property ownership rules on the island.

Although a few crofts are owned by its original inhabitants, incomers are not allowed to own land or build houses on Canna, and tenancy agreements are capped at 20 years.

The National Trust is the absentee landlord, you see?

Don’t think so somehow

The home of the father of modern economics will reopen to visitors in the autumn. Heriot-Watt University is spending £4 million restoring Panmure House in Edinburgh’s Old Town, where Adam Smith spent his final years.

The 17th-century mansion has lain empty for several years, but soon visitors will be greeted by an original copy of An Inquiry into the Nature and Causes of the Wealth of Nations.

Smith’s 1776 work influenced Karl Marx and was reputed to have a permanent place in Margaret Thatcher’s handbag.

It’s a hell of a weight for a book.

Also, as I understand it, it was a volume of Hayek she slammed down and said “That’s what we believe.”

Dear God I’d love this job

Internal Job Opening

Vacancy Notice –
Contractual agent, FG III

This is to inform you that the Greens/EFA group in the European Parliament is looking for a full-time replacement for the position of ECON adviser (fixed-term contractual agent contract, function group III – Contract until 31/12/2019).

Indicative starting date: 1st of February 2018

Agreed, we’d have to be informing the Greens about economics starting with Peter has two apples, John wants one and has some money but still.

So, a question for economic types

It’s well known (umm, OK, not well known but in detail some people know it) that at some point of revenue raising you’ve got to go off and tax the poor. You just can’t squeeze enough out of the richer to pay for a large State.

For example, an American economist (whose name I can never damn recall, which is annoying because he made a significant pledge to my unsuccessful kickstarter to do a book on the subject) keeps pointing out that if the US wants to move to a welfare state of European size it will have to have a VAT – a regressive tax. He also points out that the Swedish et al systems pay for themselves by taxing the poor more, not the rich that much more.

Which leads to a bleg. The information is definitely out there, but has anyone collated it?

We have the distributional impacts of taxation. The top 10% pay y % of all tax (usually we just see income tax, but the calculation for the total tax burden exists for UK and US at least). Top 20% z% and so on.

OK, has that all been collated?

My question being, well, do larger States ever manage to finance themselves by higher tax burdens on the richer? Or is it always done by taxing further down the income levels?

That is, do we have collated somewhere the percentage of GDP raised on the top 1%, top 10%, top 50%, bottom 10% and so on. Which can then be cross referenced against government as %ge of GDP? Or has this even been done?


Yep, poverty is shit, isn’t it?

Fanja Randriamihavo, 15, is one of 3,000 people who live and work in Ralalitra, one of Africa’s largest rubbish dumps. The site, in Madagascar’s capital, Antananarivo, spans about 50 acres. Each day, it receives more than 600 tonnes of waste from the capital and from the three million residents of its sprawling suburbs.

People who work on the dump site collect metals, coal and plastic from among the chaotic mess of needles, rats, faeces and aborted babies. They are paid just 3,000 Malagasy ariary ( 70p) a day.

As a side issue, it’s amazing how they become aborted babies when there’s shock horror to inculcate, mere blobs of tissue when we discuss abortion or not.

Still, yes, poverty is shite:

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.

After all, global poverty is not something recently invented for the benefit of multinational corporations. Let’s turn the clock back to the Third World as it was only two decades ago (and still is, in many countries). In those days, although the rapid economic growth of a handful of small Asian nations had started to attract attention, developing countries like Indonesia or Bangladesh were still mainly what they had always been: exporters of raw materials, importers of manufactures. Inefficient manufacturing sectors served their domestic markets, sheltered behind import quotas, but generated few jobs. Meanwhile, population pressure pushed desperate peasants into cultivating ever more marginal land or seeking a livelihood in any way possible–such as homesteading on a mountain of garbage.

That is, we’ve a cure for this sort of absolute poverty. Neoliberal globalisation.

Please note that my proof comes from a left wing New York Times columnist (but I repeat myself) and Economics Nobel Laureate. This ain’t just ideological burblings, this is the real world cure for the ailment.

Better for what?

But the only thing that can truly shape a better capitalism is better representation of people in politics and the workplace: a recognition that the private sector isn’t inherently superior,

Forget the usual confusion between markets and capitalism there.

Better at what?

A screwdriver is inherently better than a hoe? Or not? Or perhaps each is the appropriate tool for a specific task?

Alex Hearn needs to learn some economics

While such a string of acquisitions certainly represents a massive inward flow of cash to Britain, it could have its downsides. If Britain’s most promising startups always pick guaranteed cash now, over the prospect of a much bigger payoff later, then the nation will never have its own tech giants to rival Apple, Google and Facebook.

The companies don’t belong to the nation. Further, the value to the “nation” is in being able to use the technologies, not in who owns them.

Seriously, we Britons are made poorer by Google’s existence?

It’s the same idiocy as the insistence that nations trade with each other. It’s simply not true.

So here’s a question on historical rates of pay

In the face of so many present-day problems, it’s all too easy to become wistful for a lost golden era of nationalised industry that brought secure jobs and forged strong communities. The low-paid jobs in call centres and distribution sheds, most located in bigger cities, that eventually arrived to replace the noise and filth of the pits were cleaner and safer, but they lacked the solidarity and support networks. Soon they, too, may disappear.

It is, of course, a lament for the vanished days of coal and steel jobs in South Wales.

But an interesting question, one to which I on’t know the answer. Were those jobs, by today’s standards, well paid? Are today’s call centre jobs, byt the standards of those days, badly paid?

Sure, obviously, I know, those jobs were relatively well paid at the time. One that sticks in the mind was that miners, mid-70s, were getting 200% of median wage. This was, as far as I can see, £50 a week for manual workers. OK, double that for miners and steel workers. Why not, we’re just guessing anyway.

Upgrade that for inflation. £800 a week from inflation only. £1,100 a week as the labour value of it.

If that’s correct then they would still be regarded as well paid jobs. But I think I might be overcooking those 1975 wage levels. So, anyone able to actually fin what wages were, in nominal terms, back then?

Polly is nostalgic for this

For some visitors the London exhibition will be nostalgic. There is a recreation of a chilly 70s front room with depressing news reports on the telly, candles for when the lights go out, a copy of Look-In, and a Peters and Lee record that someone hasn’t put back in its sleeve.

After all, the mid-70s is when we were most equal…..

Lordy be Larry, you forget your Marx

Blue Planet 2 demonstrated the terrifyingly fragile state of nature’s ecosystem. One of the key messages from the BBC series was that a delicate balance exists in the oceans between predators and prey. If there are too many predators, the stocks of prey fall. The predators go hungry and their numbers dwindle, allowing the prey to recover. Balance is restored.

Humans have their equivalent of this predator-prey model. It is best demonstrated by the workings of the labour market, where there is a constant struggle between employers and employees over the proceeds of growth. Unlike the world of nature, though, there is no self-righting mechanism. One side can carry on devouring its prey until the system breaks down. Over the past 40 years, employers have been the predators, workers the prey.

Even sodding Ol’ Karl got this right. Full employment is the cure. Only if there is a reserve army of the unemployed can the capitalists not pay their workers more as productivity rises. Without the reserve army then rising productivity means the capitalists are in competition for each other for that labour – wages rise therefore.

Really, we know the mechanism here.

And this isn’t even true:

Seen in the simplest terms, the story of political economy over the past four decades is a class war between capital and labour, which capital has won hands down. The battlefield is littered with evidence of labour’s defeat: nugatory pay awards, precarious work, the collapse of collective bargaining, and cuts in public spending.

And to the victors have gone the spoils: higher profits and dividends; lower personal tax rates; a higher share of national income.

The capital share is about the long term average. Risen from the 70s, sure, but not out of line at all. Taxes upon consumption and subsidies to production have risen (VAT largely) and mixed income has risen. Thus the labour share has fallen, but not the capital share risen.

This is simply incorrect.

There’s something about these numbers

The richest 0.1% of the world’s population have increased their combined wealth by as much as the poorest 50% – or 3.8 billion people – since 1980, according to a report detailing the widening gap between the very rich and poor.

The World Inequality Report, published on Thursday by French economist Thomas Piketty, warned that inequality had ballooned to “extreme levels” in some countries and said the problem would only get worse unless governments took coordinated action to increase taxes and prevent tax avoidance.

Not sure about this but. The 0.1% have more wealth than the bottom 50%. That’s a reasonably normal feature of wealth distributions by the way.

So, if the amount of the top .1% has risen by as much as that of the bottom 50% then the wealth gap must have fallen, no? Say, 25% (about what they do say) went to the tippy top people, 25% of the increase in wealth. The same also to the bottom 50%. Then the ratio between the two must have fallen.

Ain’t this a surprise?

Almost 100 million people are pushed into extreme poverty each year because of debts accrued through healthcare expenses.

A report, published by the World Health Organization and the World Bank on Wednesday, found the poorest and most vulnerable people are routinely forced to choose between healthcare and other necessities for their household, including food and education, subsisting on $1.90 (£1.40) a day.

Researchers found that more than 122 million people around the world are forced to live on $3.10 a day, the benchmark for “moderate poverty”, due to healthcare expenditure. Since 2000, this number has increased by 1.8 million a year.

Outrageous, don’t you think? People are budget constrained?

Poor people more so?

The things that will be revealed to us, eh?